Maltese Blockchain Company Wants You To Buy Into A Cryptocurrency To Own A Small Part Of A Bank

A blockchain company run by the executive chairman of insurance firm GlobalCapital is targeting to raise €150 million from the public for an ambitious plan that includes the acquisition of the majority stake in a European bank.

The company, called Palladium, launched the world’s first-ever initial convertible coin offering (ICCO) at the Malta Stock Exchange today - a few days after Parliament passed a law regulating the blockchain industry.

The ICCO concept means investors will not only purchase tokens, but will be able to convert these tokens into Palladium shares three years after their issue date.

Palladium’s founder Paolo Catalfamo confirmed that 50% of proceeds will go towards the acquisition of a controlling interest in a European bank.

Catalfamo was in the news back in March when, as executive chairman of GlobalCapital, he said his company had made a binding offer for the acquisition of the majority of shares in Malta-based Lombard Bank.

In an official company announcement, GlobalCapital said its offer was financed by private equity firm York Capital, but York Capital insisted a day later that this was not the case. Catalfamo apologised for acting prematurely but said his bid still stands.

Asked by Lovin Malta whether the bank which will be purchased through this ICCO is in fact Lombard, Catalfamo refused to commit.

"Palladium is preparing an application for a banking licence and in the meantime it has identified a short list of potential acquisition targets in Europe,” he said.

Palladium's owner had recently tried and failed to acquire a majority stake in Lombard Bank

Apart from the 50% stake in the bank, 35% of proceeds from the ICCO will go towards the development of a regulated crypto exchange and clearing and settlement blockchain platform. This is intended to allow users to buy, sell and trade in crypto and fiat currencies on the same platform and within a regulated framework, slashing bureaucratic obstacles.

The remaining 15% of proceeds will go into unspecified “strategic investments in financial services and blockchain companies complementing Palladium’s business”.

Catalfamo pulled out all the stops for his ICCO today, inviting Prime Minister Joseph Muscat, parliamentary secretary for the digital economy Silvio Schembri and MFSA chief executive officer Joseph Cuschieri to speak at the launch.

In his speech, Muscat said that Palladium is not a “flash in the pan” but has shown commitment to Malta over the years.

“It’s going to become an increasingly regular occurrence for me to attend such launches of emerging technologies,” he said. “We’ve worked our fingers to the bone to see companies like Palladium launch technologies that bond banking with cryptocurrencies.”

Schembri said Malta’s regulation of the blockchain space has already caused a shift in the world’s attitude towards cryptocurrencies.

“A few months ago, the prevailing attitude globally was that cryptocurrencies should be banned, but in the past few months there’s been a growing acceptance of the need to regulate them,” he said.

Cuschieri, for his part, pledged that the MFSA will invest in new cutting-edge technologies to ensure blockchain companies are compliant with anti- money laundering laws.

“My vision is to transform the MFSA into a forward-looking regulator that can do more with less,” he said. “We will improve our monitoring of these companies to determine high-risk areas early on and address any problems effectively, and we will conduct proactive market surveillance to detect and take action against market malpractices as early as possible.”

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